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An Economic Analysis of Exclusion Restrictions for Instrumental Variable Estimation
van den Berg, Gerard J. - 2007
Instrumental variable estimation requires untestable exclusion restrictions. With policy effects on individual outcomes, there is typically a time interval between the moment the agent realizes that he may be exposed to the policy and the actual exposure or the announcement of the actual...
Persistent link: https://www.econbiz.de/10012777599
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Exponential Growth Bias in the Prediction of Covid-19 Spread and Economic Expectation
Banerjee, Ritwik - 2020
Exponential growth bias (EGB) is the pervasive tendency of people to perceive a growth process as linear when, in fact, it is exponential. In this paper, we document that people exhibit EGB when asked to predict the number of COVID-19 positive cases in the future. The bias is positively...
Persistent link: https://www.econbiz.de/10012823853
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Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya
Strobl, Renate - 2017
In this study we experimentally investigate whether solidarity, which is a crucial base for informal insurance … have important implications for policies that interact with existing informal insurance arrangements …
Persistent link: https://www.econbiz.de/10012948691
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Hidden Insurance in a Moral Hazard Economy
Bertola, Giuseppe - 2013
with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then … standard functional form restrictions ensure that individual objective functions are optimized by an effort and insurance … combination that is unique and satisfies first- and second-order conditions. Modeling insurance incompleteness in terms of costly …
Persistent link: https://www.econbiz.de/10013071425
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Disappointment Aversion and Social Comparisons in a Real-Effort Competition
Gaechter, Simon - 2017
We present an experiment to investigate the source of disappointment aversion in a sequential real-effort competition. Specifically, we study the contribution of social comparison effects to the disappointment aversion previously identified in a two-person real-effort competition (Gill and...
Persistent link: https://www.econbiz.de/10012956031
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Economic Polarization and Antisocial Behavior : An Experiment
Bigoni, Maria - 2019
Economic inequality may fuel frustration, possibly leading to anger and antisocial behavior. We experimentally study a situation where only the rich can reduce inequality while the poor can express their discontent by destroying the wealth of a rich counterpart with whom they had no previous...
Persistent link: https://www.econbiz.de/10012863801
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Motivated Belief Updating and Rationalization of Information
Drobner, Christoph; Goerg, Sebastian J. - 2022
We study belief updating about relative performance in an ego-relevant task. Manipulating the perceived ego-relevance of the task, we show that subjects update their beliefs optimistically because they derive direct utility flows from holding positive beliefs. This finding provides a behavioral...
Persistent link: https://www.econbiz.de/10014242740
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Reverse Bayesianism : Revising Beliefs in Light of Unforeseen Events
Becker, Christoph K.; Melkonyan, Tigran; Proto, Eugenio; … - 2021
Bayesian Updating is the dominant theory of learning in economics. The theory is silent about how individuals react to events that were previously unforeseeable or unforeseen. Recent theoretical literature has put forth axiomatic frameworks to analyze the unknown. In particular, we test if...
Persistent link: https://www.econbiz.de/10013315077
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Correlation Neglect in Belief Formation
Enke, Benjamin - 2013
Many information structures generate correlated rather than mutually independent signals, the news media being a prime example. This paper shows experimentally that in such contexts many people neglect these correlations in the updating process and treat correlated information as independent. In...
Persistent link: https://www.econbiz.de/10013082140
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Intended College Attendance : Evidence from an Experiment on College Returns and Cost
Bleemer, Zachary - 2015
Despite a robust college premium, college attendance rates in the US have remained stagnant and exhibit a substantial socioeconomic gradient. We focus on information gaps – specifically, incomplete information about college benefits and costs – as a potential explanation for these patterns....
Persistent link: https://www.econbiz.de/10013012819